Travis Perkins-owned chain reported a 1.4% LFL decline in delivered sales in 2011, as demand for delivered kitchens and bathrooms tails off.
Travis Perkins blamed poor consumer confidence and lower levels of disposable income for a less than glittering performance in its retail division.

Revenue in the division, which includes DIY chain Wickes, was up 1.5% for the year ended December 31, 2011 to £1,018m. New space contribution boosted sales by 2.9% for the year, said the group. However, operating profit fell by £14m to £45m, impacted by lower sales and investment in store expansion, including the 13 former Focus stores acquired by Wickes last year. These negative effects outweighed the benefits of an improved gross margin, said the group.

Gross margin in TP's retail division increased 1.3% in 2011, boosted by direct sourcing and improved purchasing terms, while adjusted operating margin fell by 1.4% to 4.5%, impacted by the increased overheads at Wickes.

The decline in demand for high-ticket items looks set to continue into 2012, with TP's retail division reporting a 3.1% LFL decline in delivered sales for the first seven weeks of the financial year.

Looking ahead, the firm said: "Our research suggests that markets will remain subdued in 2012. We expect trade market volumes to decline slightly... The consumer sector is likely to decline by a more substantial amount as consumer confidence remains low, unemployment rises and disposable income remains under pressure."

In what it described as a "weakening market" the company said it would focus on leveraging self-help initiatives in 2012, as well as paying off debt and maintaining selective expansion investment.